By Bill Thornton
Every day, approximately 1,200 people join the population of Texas, the main reason being that our state is a great place in which to live, work and do business. And the Texas population is expected to nearly double by 2060. Therefore, it is essential that we keep up with growing demands by providing adequate infrastructure to attract quality jobs and companies.
Water supply is a key piece to this infrastructure. As a chamber that represents more than 1,900 businesses, we know that along with roads and a favorable tax environment, providing our citizens and companies with an adequate water supply is Economic Development 101.
The largest users of water in our region are the municipal entities that supply our growing population, and that demand is expected to jump by 61 percent, even with conservation measures. Manufacturing, a key component of our local economy, also uses a large share of the region’s water, and manufacturing needs are expected to rise by nearly a third, according to the Texas Water Development Board.
While transportation infrastructure needs are felt by our citizens every day due to gridlock, water needs are less apparent. As long as water flows out of the faucet, many do not recognize the dire need for a properly funded water strategy.
State leaders have been working on this issue for some time. Then-Lt. Gov. Bob Bullock and Gov. George W. Bush helped pass the State Water Plan into law 16 years ago. But the $53 billion plan, $27 billion of which is paid for by the state, has never been financed.
This is why voter approval for Proposition 6 on November 5th is of the utmost importance.
The Texas Legislature earlier this year authorized the creation of a statewide water fund. Proposition 6 allows for a one-time-only allocation of $2 billion from the state’s Rainy Day fund, which will create a perpetual loan fund to help local communities fund critical water projects.
This plan will not raise taxes and all of the money would be dedicated to water projects. The Rainy Day Fund will continue to be strong. In fact, the Texas Taxpayers and Research Association estimates the fund will be replenished fully due to the state’s strong oil and gas production.
Some have argued against Proposition 6 on the grounds that the Texas Water Development Board has $6 billion in bonding authority, which voters approved in 2011.
While the $6 billion in bonding authority is a key financial tool, without the perpetual loan fund, these bonds are issued on a self-supporting basis. That means they are to be paid back immediately, before water projects are allowed to mature.
By passing Proposition 6, the $2 billion will be used in concert with the $6 billion in bonding authority, which serves as a critical loan enhancement. These loan enhancements provide water districts a lower rate on their loans and a deferral of principal and interest payments for a specified period of time. This is significant because water projects, like any other infrastructure improvements, are expensive and long-term. A deferral gives borrowers time to implement the projects and begin collecting from customers. Providers will then use those revenues to pay back the state and replenish the perpetual loan fund.
An adequate water supply ensures continued economic growth and prosperity in Texas. A “yes” vote on Proposition 6 will ensure that long-term supply of water.
Bill Thornton is president and CEO of the Fort Worth Chamber of Commerce.